Severance packages at issue in Future Shop employment dispute

For employees and employers alike, layoffs and dismissals are among the most difficult employment-related matters. In Canada, termination of employment must be handled not only in accordance with provincial and federal legislation, but also with respect to any applicable clauses that may have been included in the employment contract, and the common law.

In terminating a worker's employment, failure to cover the appropriate legal bases could prove costly for an employer, as employees may have legal recourse to take the matter to court. If you are an employer or an employee involved in a dismissal-related dispute, seek counsel from an experienced employment lawyer to ensure that your rights and interests are protected.

Severance packages are a common aspect of employment dismissal in B.C. and throughout Canada, and sometimes severance packages are the subject of dispute. Recently, approximately 1,500 former employees of Future Shop received severance packages. Future Shop is owned and operated by Best Buy Co. Inc.

On March 28, 66 Future Shop locations were permanently closed by Best Buy Canada, and 65 other Future Shop stores are expected to be converted into Best Buy stores. Future Shop employees reportedly showed up to work and discovered that they no longer had a job.

The employees were presented with severance packages, which include payment in lieu of notice. Best Buy also said that it would provide former employees with outplacement services, postings of other employment opportunities, and a website dedicated to answering former employees' questions.

As an employer, it is important to recognize that severance obligations can be more onerous for large layoffs, or where the company is over a certain size. Employers operating in multiple Canadian provinces need to be mindful of differences in provincial legislation to properly calculate employee entitlements in this area.